Grains are mixed in overnight trading:
Sept Corn + 1 cent/bu (5.46 ¾ )
Dec Corn + 2 cents/bu (5.35 )
Nov Soybeans + 9 ¼ cents/bu (13.59 ½ )
Sept Chi Wheat – 4 ¼ cents/bu (6.43)
Cdn $ -0.00080 (80.135 cents)
WTI Crude Oil +0.26/barrel (74.36)
Grains overnight initially gave up a small amount of their post USDA July Crop Report gains from Monday. Volumes are described as light, as traders focus on US Midwest weather. The USDA left production numbers for corn and soybeans unchanged, as expected, while making minor tweaks to demand flows. The biggest surprise in the report was a bigger than expected cut in Hard Red Spring Wheat production, due to ongoing drought concerns in the northern Plains. The spring wheat crop is projected to be the smallest since 1988, and is forecast to be 240 million bushels smaller than what was produced last year. Those cuts allowed Minneapolis wheat futures to scream higher yesterday, which supported the entire wheat complex. Unfortunately, this rally is leaving US wheat uncompetitive in world wheat markets, as the world (less China) is looking at it’s highest projected wheat inventories in 3 years.
Last night’s USDA Weekly Crop Condition Report showed conditions steadying, as good/excellent ratings for corn improved 1% and soybeans were unchanged. Rains across much of the Midwest in the past week have lessened thoughts of major cuts to corn and bean yields, for the time being. Rains are forecast for later this week for the driest parts of the US northwest, which is the production zone most in need of precipitation. After this week, forecasts look to turn warmer and drier across the belt, which will underpin grain values.